government is anything like detroit, america is in big trouble. that's our show. see you next week.d the willis report is next. >> could evening. i am rory rthman. tonight what was the big lesson investors learned after the fed took down its steve cohen oneeof the biggest man on wall street? the only way to make money in the market is tucci? also billions of doolars disappearing every year and nearly all of us are snagged with the unnecessary charges how do you deal with embarrassing many questions with close family members? we have some answers and more coming up to knight of "the willis report."

lori: stocks are up again five weeks in a row what a week it was one of the biggest money managers stephen:suffers a spectacular fall his hedge fund hit with criminal insider trading charges am pleading not guilty today. but will the case hurt investor confidence? it is cheating the only way to make big bucks? let's bring in the man that millionaires invest their money with. so good to see you, ed. >> i thank you for having me lori: what is your take on the message sent to sec capital? what about the percentage

returns outpacing the broad market averages to push the rules a little bit or a lot? >> >> you said the word allegedly because nothing has been proven there are allegations out there i guarantee there will be a vigorous defense coming in there is a lot in the indictment and people assume it is correct but absoluty not. there are great hedge fund managers and i have been in the business 27 years and it is not easy to get great returns because it is in but if you just compound your money then history says he will earn tenders will% in the stock market over a period of time. lori: but the tally on case and he is behind case right now -- behind bars right now but to his case innocent

until proven guilty but overall has the same performance lately. >> you bring up a great point because it is definitely aarnishing going on of the hedge front -- hedge fund energy. a lot of people turn to hedge funds for their portfolio and that s&p 500 has outpaced most managers even though there are unique styles they have outpaced that but we never evaluate a portlio over a three-year period normallfiver tenures it anybody else there that has pulled money away from the hedge fund rethink that because you will need to have alternatives. lori: what sort of allocations? how much should be comprised? hedge funds, private equity? >> i will make it simple

there was a study done what is the best mix to have? of the publicly traded investments with the best return was the least amount risk. 87% went into henchman's if you ask for the best use or how much money we typically put 20 or 25 percent of our money in those portfolios with investment with the non correlation and did you wi find the hedge fundanaged futures than so 25 percent in alternatives. >> if they are underperforming right now, can you pinpoint the time when that will reverse? >> it has been a long expansion the point looking at that growth cycle so if

you are investing in this cyclical stock saugh a couple years of thother alternative investments. >> my hair is gray for a reason these are only some investments based on the positive economic condition the mome that changes everything goes down tother. so i always have things that are not doing well. so you say when will that switch? you should always have many in alternatives arenhe equity markets as well because you just never know. lori: the grey hair is very distinguished looking for you. a deal think they care if they push the rules?

how important is it to have a solid reputation for playing by therules with your clients >> no question. everybody is out to tarnish every betty and even with our side of the business not hedge fund but the broker market i don't think clients appreciate anyone who is cheating and people are disgusted by those people and i am that way as well. so i absolutely lookit this if the allegations are true there will be some truth to this and then you know, the bad it will happen in bet individuals don't want to be around bad people and i don't want to either. lori: we will leave it there. thank you so much. do you care if you're a money manager and the rules to give you a higher return? log on gerri willis.com and

we will share the answers tonight. stocks making americans feeling a little richer battle sounds like good news buthat is the real state of the u.s. economy? let's bring in peter maurice c.. from the university of maryland. what was your take? people look at it as a lagging indicator how we were feeling couple months ago but that is the best levels we have seen in many years is it a think -- a sign of things to come? >> that index was highly correlated with automobile sales and there we're selling ev more cars with good prices it relates more to of the stock market than

it does the broader economy and over the last nine months they have been cut in half next week we will find out the economy over the last three quarters and that is not very good at all. lori: so do you think there is any potential under that growth rate? is this the new normal? >> no. most economists do see things picking up in the second half. u.s. economy has enormous potential. looked at the rate of productivity growth in manufacturing. we do need to deal the currency pblems trying to grow at our expense of so we could get this economy going on all eight cylinders so we

need to right puic policy. >> e economy was criticized for lack of specifics. >> i had a comment thawas quite citical. his record is a very good and his policies are about dividing up the pie as opposed to making a bigger this administration is flat out of ideas and then to come up with the growth agenda. lori: what else you want to see done? is there a simple solution? we have another jobs report and a lot of talk t little action in. >> of a bike to see us get very aggressive with china on the currenc

in to bring down the value of the market is a great ideaea. >> but then look at that and that is the incentive to cheat even more. >> you have done everything but short of currency manipulator. >> actually we have just called the names and have not and we have done a good job at that but with the exchange rate that would work quite nicely but with regard to other policies with oil and gas of the to coast and the gulf of mexico we should hold regulations with the efficacy test. lori: a also by our treasuries. it is such a tense

relationship and i am glad it went in that direction. thank you. a lot still to come including advice on awkward many moments to splitting the check at a restaurant and did you know you are probably spending hundreds of dollars a year on nothing? take a look at a new rash of grave charges hit to your wallet.

lori: new report says amicanlose billions of dollars every year to their credit card and they don't realize it they are called grey charges filling all sorts of unwanted charges with memberships to zombie charges and the fees that won't die. here to help us get rid of them from smart credit.com, john you put together a list of the most common charges. free to pay? >> that is when you go to

the web site in exchange for the credit scored you are required to give a method of paymentormally a credit card if you have signed up for a trial membership if you don't cancel it within a few weeks or a few days then they will start his tea in your credit card for a modest charges between 10 and $15 every month. lori: it is confident you have achieved cancellation? >> exactly. that is the problem with grey charges you can cancel the subscription but few months later here it is again. lori: you list of the renewals, give me some examples of these other grey charges. >> the unintended purchase is one with every by something on the web site --

website tickets to the point @%u finally by we want y have to say no thanks and those things to cross sell and at south bend you may have thought this collect along the way they use the something on your credit card you did not want to buy. also of a renewal. this is if you purchased the domain name and on the register for one year then after that i ddn't what it but then you will start to see that hits the credit card again. lori: is any of this illegal? >> the million-dollar question. it is arguably unethical in some thinking is illegal but some to e companies were nailed with some hefty fines but underscores the importance of you ian me to become more engaged with our

credit card statements to understand what every one of those line items means to correlate with what we intended to rchase. lori: if you cv $2 charge that is what the bank on you will not waste the time to go to the hassle to track that down or t on the phone to go through the diffult computer web site how you canceled. day you ha advice? >> exactly right. there is a strategy behind the amount to between 10 and 20 it is large enough to justify i would have used my card for that's but it is also not popping out you need to start using, if you are not going to do a better job at looking at your statement and there are services that will help deal.

mint.com they will tell you this is out of the norm do you really intend to make thisharge? >> i am not advocating to spend more to make sure you are not spending more. these are freeeservices it is a second and tr of defense. lori: what consumer protection ready until bureau? should it be involved? >> it is the sleeping giant of these perpetrators that they do not want to wake up because i will tell you if they get involved the fines will be impressive so ty want to keep it low-key they're very willing to credit you back if you find someone whwill answer the phone to listen of your

challenges but remember you'll have objections from the credit-card issuer to say i don't authorize that charge you don't always have to argue with the merchandiser data would to be involved either. lori: news that you can use. 14 billion each year. one of the side effects of the recovering housing market is the return of the house a slap. we have details. how you get through those awkward mny moments? next.

lori: we have all experienced those uncomfortable mny moments whether splitting the bill at dinner are having a close friend asked for many favors it is hard to about gracefully but it can be done you ll never feel it again. with the director of consumer education at credit.com what do you say is the biggest money embarrassment? >> i informally polled people certainly having a friend or mily member asking for a loan, getting

hit up for many you don't know what to do real encounter this as some time. lori: what is the proper protocol when you are approached by a family member? >> this is common. first of all, if you are not willing to make it a gift do not load them into their asking you because they caot get the loan to somewhere else so they may not be able to repay you so you can't say i have been burned in the past was ju put it in writing so we're on the same page if they'r not willing to do that then you say i am sorry. lori: what about assigning the interest-rate? is below market but they have to continue to make a

pate made it to set up the terms but to put the low interest rates on it? >> the irs wants you to do that you can get the rate off the web site so if you do not feel comfortable tell them by law you have to hand. >> you have faith sister or brother constantly asking you for $20 not a big amount of money but if that is getting on your nerves? >> it can happen with the of coworker who forgets their wallets every time at the lunch counter sought some point you have to say i will say no if i am not willing to give them the money that i will say no and they will get the point. lori: charity? >> you are involved to be asked a lot a and we cannot donate to every cause that

we care about. you may want to set some boundaries. let's say you have a charitable budget i will support people that i knew we're doing good things not a lot ofoney but somebody says i am walking 60 miles for breast cancer you will support them but also select wonder to charities you can say these of the charities i am supporting this year she had a personal story period there really made me respect why she was supporting that arity that year instead of others. lori: great advice. thank you. though it is a time for the stories you are looking at fox business.. keeping the markets in check the last minute turn helped but traders are looking

ahead to a packed schedule including the monthly jobs report in the federal reserve meeting and you should not expected to name soon the president will not name ben bernanke successor until the fall his current term expires early next year. the oil maet cools off this week oil fell to $105 a barrel marquis the first weekly decline even gas prices were falling with $0.2 and apple shares of the global smart phone market fell to lowest level in five years. according kirk to the abm research to lois level since 2019 years after the launch of the first by phone. those are the hot stories on fox business.com. a warning before going back to school shopping it will

cost you more. house flping is back to find out how to get the most ng for your buck when you are flipping a home.

lori: flipping a house seems so 2007 and buying a home and selling it for profit played a critical role of the housing meltdown that catapulted the nation into the worst crisis of 80 years but the rket is showing siggs and experts say flipping a home could boost your bottom line. i will bring in our real estate expert, and race to

see you is it really back? >> it is. everyone around me is clipping a home today to me and a and prices are very strong and e of the real reasons it is back because you see a tremendous buying from institutional buyers to y hundreds of homes we see the low interestnvironment up until recently they have staaed low. lori: will that chae? >> thais the one variable inooks like it is here to stay that a lot of places have hit rock bottom and are comi back so it is a good time if you are a professional you do know we we're doing to get in that business. but a lot of people do get hurt. lori: so let talk about the pitfalls a into thred

flags.. >> if you buy the home from the big remember the previous homeowner could not make his mortgage payments so too does are the houses and not a good repair look for red flags like stains may be that is a problem withhe plumbing or a leaky roof had a professional appraisal in the inspection to make sure you understand what is wrong with of home understand we can sell it because you could buy it it for cash which is keeping also make sure by ears need the appraisal to make sure that you can sell it if we hear flippers' earning 20 grand? >> it is possible bu if you get into the business you have to be prepared to lose money on the first few deals

you have to have the right team and a dusty and time fres and wait longer if you cannot sell immediately. there are so many variables in you can get hurt. normally that $20,000 is the average that people set the house from the purchase price that mayot include profit depending on how much tout into the home. lori: how long should you expect? >> most that do it with the hard money lenders that are set my professional are trying to buy a home in the flipt within six months. lori: they say most of those markets are in florida? what is special? >> florida is the best day in the country but it has always enjoyed a stronger

real estate market bid is a bellwether because it is fa-growing state over the past seven decades is the fastest-growing state in the country s it continues to see investment and don't forget we have too good to 50,000 per year moving to this day and this year we will have more than 200,000 that is more than 2008, 2008, 2009, 2010 combine so that means more americans are moving as are those who want to live here from other parts of the country. lori: thank you so much. interesting peck. some parts of the country are better than others but the same holds true with the unemployed in some states it is better to be without a job. that list is the top five

minnesota. the state's low unemployment rate of 5% is why it is on the list. number four, iowa. four-point 5% in the unemployment insurance is 43 percent of the average weekly wage. number three is north dakota the average benefit is $400 and only 800 people received it just about 3%. number two, hawaii this seems like the best date the average unemployment benefits makes up weekly wages and the number one stage is montana benefits cer more than 40 pcent of what you are earning in employment has grown by 2% this year so where are the worst places to retire? tennessee and louisiana.

when we come back a florida teacher fired for putting on a fire. find out why parents you are paying more for school suppes this year. how much? and next.

lori: at time of year as we refuse to an acknowledged back-to-school season but moms and dads are dishing out hundreds of dollars of school supplies and if this seems like you were spending more than usual, you are. welcome. estimates are putting back-to-school cost of ov $600?

july buy school supplies at the drugstore no way i would spend that amount. how do they come up at this figure in white are priceces going up dramatically? >> as the kids become older more of them want the latest gadgets and that is driving those members. lori: are we including technology? my kids are a little like crayons and pencils not computers or ipads. >> the new books is not going up but it is the technology in theegadgets that all the kids are wanting more and more. so 1200 and another is 600.

lori: but it is still the backpacking index that you put together that is far outpacing inflation and 7.3% podium -- inflation rate is below 2%? >> the backpack index was put together by someone else but mostly driven by technology allothe school districts are hurting and teachers are passing the burden for supplies back to the kids and the parents that the school traditionally provided. lori: doesn't matter where you shop? >> all the big retailers try to convince you they have the best prices but actually it pays to shop around starting next week a lot of

states have the sales taught -- sales tax holiiays to shop the weekend for free so that could add up. lori: you put it of list of ideal credit cards can you give me some examples? >> absolutely. in there at the highest point. so the parents can bring down the budget significantly some king give the 400 statemt credit for spending $3,000 or depending on the shopping you could get 6% cash back dead even like myself that have small kids.

>> the chase card also has the bonus category. and then this supermarkets and department stores from american express. and for the parents better small business owners they can use the american express card or the car from chase to get 5% cash back on office supplies to go and have back-to-school shoing there. lori: it is not even in august. that is hard to swallow. forget the cost. >> figure for having me. lori: a day care teacher is fired for putting out a fire. the school said she left the

kids alone. it is not the hackers who want your reformation but the f is gingafter your password. next.

me. lori: u.s. government has reportedly demanded major internet companies direful to the user passwords it could have an escalation of government surveillance techniques that have not been disclosed and elizabeth macdonald joins us with the latest.

>> u.s. government has been asking major internet companies like microsoft a and google's and facebook for passwords according to one websites that quotes to sources cnet gives an even worse scenario from edward snowden that said he is disclosing information that gives federal government access to google's and facebook and other major providers. the companies have strenuously devout -- deny they have given this access but they're not saying if the government has actually asked r that password information and now if it is able to determine a person's password that is normally in corrected that could be used to long sought -- log onto

the account or set up the correspondence or impersonate the user some details are not clear includin when and at the request bbn and if it is targeted at individuals or is the entire database dumped? palace section to do 15 does allow them to get private information that is what these two data mind of those calls and senators are crying foul will. >> when the american people find out how their government has interpreted the page redact, they will be stunned and they will be angry. from my position of the senate intelligence committee i have seen government activity conducted under the umbrella of the pager attacked that i knew would astonish most of our people.

lori: the oregon democrat asserton the senate intelligence committee also said this week at any event the government's authority to collect information on law abiding citizens is essentially limitless under the law. know if that company has been accessing your password is set to the internet company to fight to win your behalf of the remains to be seen to be obligated the information they're getting your password information and it is a developing story we will follow it closely. >> internet passwor? privacy is so in question in. one day care teacher is claiming she was fired for putting out a nearby fire to save their lives by her boss said she broke a safety rule

should she have been fired? here to duke and out is our panel. does the teacher deserved to lose her job? >> no question she did not deserve to lose her job but when you get into law that is not the same way but the at will employee does not have a contractualights and who did be terminated for any reason and less discriminatory should have to bring the case as a whistle-blower she did try to protect their children in the workplace than allegedly fired for that. know whether the law covers that is debatable but unfortunately this is the case she could pursue this to see if legislation could be brought'' to find a cause of action.

>> the reason there are safety procedures in place when she went to see what was going on she could have beenen injured. there is a class of sleeping kids and if that happened under somebody was injured we would say why didn't she followed this procedure? i aid to agree that this is the at will situation but you need to have these in place you cannot have anybody doing vigilante work you are a teacher. get the kids out. lori: but it is a panic situation. >> but if children were burned to think she wod be held accountable for that. this is why the standards in the workplace don't always match with what needs to happen and there should be a breach of public policy or the exception someone like this would be questioned in

no matter what either way but to say those who are caring for our children and doing a good job should not be penalized to step out to protect them. lori: i do think this is %->> regina?tting. >> data know why she would want to go back to begin with but the person who burns the chicken nuggets should have been fired that is what caused the problem. government overlooking the actual cause been going to someone else. this could be set by someone who tried to kidnap a child. you just don't know it will be interesting how this will play out in court. lori: you have to trust teacher there put in the classroom and in charge of the students so with her

staff judgment decision her and her thought was that s could take care of that than you have to trust that is our judgment. >> but she is not a fire fighter she is not qualified >> but the fire people said after words she did the right thing she did save people from being burned but the real question ultimately is should she be penalized for sticking her neek out? will ultimately the legislature or the judge ruling to have the fortitude to recognize the cause of action could correct that but this is a sha. and also the department of education is doing investigations may be something can be done. lori: it is not over.

>> prosecutors a large volume of evidence including e-mails, wiretaps, and other reporting just act against sac visors. the fund pled not guilty to you care if your money manager is bending the rules to give you a higher return? we ask this on gerriwillis.com. 78 percentf you said yes. 22 percent said no. and here are some of your e-mails. id from maryland rights, it's interesting how the irs expects self-employed business people to know what are and are not proper businesses sections. they can't figure out what is proper for their own business. roberts says, congress should pass a rule that members must submit a letter to congress reached bill written that he or she has read the complete bill and understand everything in it before he or she is allowed to vote on it. we sure love hearing from you.

send us your e-mail. go to gerriwillis.com. that is it for tonight on "the willis report." thank you so much for joining us. it has been a pleasure. she will return on monday. have a great night in the fantastic weekend. ♪ >> less about an economic reboot and more about putting the boots to republicans. >> sincerely they have a fundamentally different vision for america, one that says inequality is both inevitable and just, one that says an unfettered free market without any restraints inevitably produces the best outcome regardless of the pain and uncertainty it holds on ordinary families. i say to these members of congress, i am laying them ideas, but now it is time for you to lay out your ideas. >> can't just be against something. we have to be for something.